Over 25 years ago, I made a huge estate planning mistake and didn’t realize it.
Fortunately, I am still here to fix it. What about you? Did you make the same one?
My kids were little and I went through a divorce so I listed my father as the beneficiary on my IRA. I figured he’d take care of his grandson’s money if something happened to me. Then, as you can imagine, life got busy and I simply forgot to change it.
Fast forward 25 years. The estate planning mistake was still there.
My boys grew up and are on their own. I’d long since remarried and my husband and I had long since co-mingled our funds. When we decided to change investment companies, I was shocked to see that my Dad was still the beneficiary.
I’d never changed it! My elderly father was ill and had remarried after my mother passed away. So if I’d have passed away at that time, it would have been a problem!
Here I was helping my clients make sure their beneficiaries were right. Did I forget about myself? I did. When I got home from work after dealing with money all day, the last thing I wanted to do was look at my own finances.
The moral of the story is anyone can get it wrong, and so could you. So please humor me and check to make sure the beneficiaries are correct on your accounts! Make sure your money is set to go to the right person.
The beauty of beneficiary accounts (such as retirement accounts ) is you can avoid probate.
When you name a beneficiary to an account, the funds go straight to that person when you pass away. This does make it harder for someone to dispute, however. It’s much easier to name the correct beneficiary now than to have your heirs try to figure it out later.
A beneficiary check-up is an easy thing to do.
All you need to do is have your account information available and call the customer service department for your retirement investment accounts, insurance policies or any other account that has a beneficiary.
If a change is needed, the company will provide you with their guidelines to make the change. They may send you a “change of beneficiary” form to sign on paper or online.
Now I take my own advice and review my beneficiaries annually when I update my financial plan — in May during my birth month (so I don’t forget.)
I sure had a scare when I thought my hard earned money might not have gone to my husband!
So what are you waiting for? Check your beneficiaries right away.